TRADING BASICS

Knowledge is power - all you need for a profitable Forex trading experience is right here

Are you just getting started with your Forex trading journey? With so much to know — from basic terms to more advanced strategies—learning about Forex trading can seem overwhelming at first. No worries, we are here for you.

At EZINVEST, we’re committed to your online trading success. That’s why we offer a variety of resources to help you hit the ground running and quickly become a Forex trading pro. These include our eCourse and the variety of resources our members enjoy, including expert tips and tricks, tutorials, insider secrets and more.

To help you get started, we’ve compiled a list of all the basic concepts you should understand before you start trading. Have any questions? Feel free to contact us to speak to one of our expert analysts!

Reading a Forex quote

Let’s take it from the top : One of the basic things to understand about currency trading is how currencies are quoted, and how those quotes are read. Since Forex is all about comparing two currencies, it is quoted in pairs. Reading the quote is fairly simple. For example, “EUR/USD at 1.3883” represents the value of one Euro in US dollars.

Note that there are two types of currency quotes:

Direct currency quotes

A quote in which the domestic currency is the base currency.

Indirect currency quotes A quote in which the domestic currency is the quoted currency.

Basic terminologyForex has its own glossary of terms which you should review at least once before starting your trade. Here are some of the most important terms and concepts you need to understand.

Base currencyAlso known as the primary currency, the base currency is the first currency used in a direct quote. It is considered as the accounting currency, which means that it is used to represent profits or losses.

Pips

A pip is the unit used to measure your profit or loss. Aside from a few exceptions, currency pairs are counted in four decimals, and the fourth decimal point is usually used to count pips. It is a unit of change used to measure an increase or decrease in the rate of a currency.

Lot

A lot is a standard trading term that refers to an order of 100,000 units.

Currency pairs are usually traded in units of 100,000 (standard lots), 10,000 (mini lots), or 1,000 (micro lots). With this, a standard lot refers to the buying/selling of 100,000 units of the base currency while selling/buying the equivalent number of units of the counter currency. For example, if you open a long position of one lot for EUR/USD for an ask price of 1.4000, you are purchasing 100,000 Euro while selling 140,000 USD.

Margin

A margin is the amount you must deposit as collateral in order to cover any kind of loss in the case of adverse movement of prices.

Forex orders

In Forex trading, a trade is controlled through orders. These orders determine how you decide to enter or exit the market. As a beginner, there are different types of orders you need to know about:

Market orders

Market orders are used for opening or closing a trade at the market place. In other words, these are the orders to buy or sell on the market.

Limit orders

Limit orders allow you to “play safe” and maximize your chances of earning a profit. You can set a limit so that the trade will be closed as soon as the price crosses that limit.

Stop orders

Stop orders are similar to limit orders in that they also allow you to “play safe.” With stop orders, however, the intention is to limit the amount of loss in the case of adverse market movement. In the case of positive movement, stop orders allow you to lock in your profits.

Entry orders

For beginners, entering the market can be complicated as it requires that you constantly monitor prices. Entry orders can save you this hassle by allowing you to enter the market at a specified price. With entry orders, you enter the market as soon as it crosses your Entry Limit.

HIGH RISK INVESTMENT WARNING:CFDs are complex instruments and come with a high risk of losing money due to leverage. 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.Please click here to read full risk warning. EZINVEST.COM is a trading name of WGM Service Ltd a Financial Services Company authorized and regulated by the Cyprus Securities Exchange Commission (CySEC) under license no. 203/13. WGM Services ltd is located at 11, Vizantiou, 4th Floor, Strovolos 2064, Nicosia, Cyprus.Information and services contained within this website are not directed at residents of the United States of America & Canada.

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HIGH RISK INVESTMENT WARNING: CFDs are complex instruments and come with a high risk of losing money due to leverage. 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

Important Regulatory Update

Dear Client,

Please be informed that the new measure announced by the European Securities and Markets Authority (ESMA), will come into effect on Wednesday, 1st of August 2018. The new regulations being introduced by ESMA will govern the leverage profiles applied to retails traders for EZInvest.com in order to protect traders and to ensure both responsible position sizing and risk management.

From 1st August 2018 (applicable to Retail clients only)

1. Maximum leverage limits on new positions Leverages have been reduced and adjusted to reflect the volatility of the underlying asset. Trading with smaller leverage means the market will need larger adverse price movements in order to impact your account.

30:1 for major currency pairs;

20:1 for non-major currency pairs, gold and major indices;

10:1 for commodities other than gold and non-major equity indices;

5:1 for individual equities and other reference values;

2:1 for cryptocurrencies

2. 50% margin close- out on account level basis

Positions will close out at 50% of initial margin requirement to reduce the risk of loss.

Example: Say you have €2000 in your account, you then open a GER30 positions that requires €1000 margin. 50% of the initial margin requirement for the GER30 position is €500. If your equity falls from your original €2000 to €500 or less, then we will close out your positions.

WE STRONGLY ADVISE YOU MONITOR YOU ACCOUNT AND MAKE SURE THAT YOU HAVE SUFFICIENT MARGIN TO MAINTAIN YOUR OPEN POSITIONS.